California Health Benefits Review ProgramReview...

California Health BenefitsReview ProgramReview ProgramBriefing: Health Insurance Benefit Mandate/Repeal Bills

January 16, 2014

California Health BenefitsReview ProgramReview ProgramCHBRP Overview

Garen CorbettDirectorDirector

January 16, 2014

Outline for this Briefing

• Overview of CHBRP

• The Process for Benefit Mandates

• Health Insurance “101” – Primer

• CHBRP’s Approach to Analyzing Mandate Bills• CHBRP s Approach to Analyzing Mandate Bills◦ Medical Effectiveness Analysis◦ Benefit Coverage, Cost, Utilization Analysisg y◦ Public Health Analysis

CALIFORNIA HEALTH BENEFITS REVIEW PROGRAM3

What is CHBRP?

• A program administered by the University of California, but institutionally independentbut institutionally independent

• Provides timely, evidence-based information to the Legislature

• Charged with analyzing:• Charged with analyzing:◦ The 1) medical effectiveness, 2) projected cost, and 3)

public health impacts of health insurance benefit p pmandates or repeals

CHBRP Reports Enhance Understanding

• Leverages broad areas of expertise of University of California faculty and researchers to perform evidence-based analysis• Neutral – without specific policy recommendations• Requested to complete each analysis within 60 days• To date, CHBRP has produced 94 analytic reports or issue

analyses 14 letters as well as numerous other resourcesanalyses, 14 letters, as well as numerous other resources and materials

CHBRP Reports Enhance Understanding

• Health Insurance Benefits:◦ Benefits are tests/treatments/services appropriate for one

diti /dior more conditions/diseases

• A Health Insurance Benefit Mandate is:◦ A requirement imposed on health insurance (whether

publicly financed or privately financed) to cover specific b fit lt t d diti fbenefits or alters terms and conditions of coverage

How CHBRP Works

• Upon receipt of Policy Committee (or Leadership) request, CHBRP lti di i li l ti tCHBRP convenes multi-disciplinary, analytic teams

• Each team evaluates:

◦ Medical Effectiveness: Does a treatment work?

◦ Cost: Will enrollees use it? How much will it cost?

◦ Public Health:

How much will it cost?

What impact will this have on the community’s overall health?

community’s overall health?

CHBRP’s 60-Day Timeline

Mandate BillMandate Bill Introduced and Request sent to

CHBRPTeam Analysis Vice Chair/CHBRP

Director Review

RevisionsNational Advisory Committee

Final to Legislature

CHBRP’s Website: www.chbrp.org

CALIFORNIA HEALTH BENEFITS REVIEW PROGRAM

January 16, 2014

California Health BenefitsReview ProgramReview ProgramHealth Insurance “101”

John LewisAssociate DirectorAssociate Director

CALIFORNIA HEALTH BENEFITS REVIEW PROGRAMJanuary 16, 2014

What is Health Insurance?

Insurance against some or all financial loss due ill h l h h 3 d illto ill health, or, an agreement that a 3rd party will

help defray medically necessary health spending.

CALIFORNIA HEALTH BENEFITS REVIEW PROGRAM 12

Estimate: US Health Spending by Age

Health Insurance in California

Health Service Plan Contracts R l d b DMHC• Regulated by DMHC• Subject to CA Health & Safety Code

Health Insurance in California

Health Insurance Policy R l d b CDI• Regulated by CDI• Subject to CA Insurance Code

Estimate: CA Insurance Source, 2014

22 2M20 0

0.0DMHC CDI Neither None

Subject to StateBenefit Mandates

Not Subject to State Benefit Mandates

California Health Benefits Review Program, 2013

Health Insurance Markets in California

DMHC-Regulated Plans CDI-Regulated Policies

Large Group Large Group

Small Group Small Group

Individual Individual

M di C l M d CMedi-Cal Managed Care ----------------

What are Benefit Mandates?

They are laws requiring health insurance to:C i di i f• Cover screening, diagnosis, or treatment for a condition or diseaseC ifi i• Cover specific treatments or services• Cover specific types of providers

A l ifi b fi ( h•Apply specific terms to benefit coverage (such as visit limits, co-pays, etc)

Federal LawsP Di i i i A• Pregnancy Discrimination Act•Newborns’ & Mothers’ Health Protection Act

W ’ H l h d C Ri h A•Women’s Health and Cancer Rights Act•Mental Health Parity and Addiction Equity Act

Aff d bl C A•Affordable Care Act

Conclusion

•What is health insurance?•Who regulates it?•What is a benefit mandate?

January 16, 2014

California Health BenefitsReview ProgramReview ProgramHow to Read a CHBRP Report

Laura Grossmann and Hanh Kim QuachPrincipal AnalystsPrincipal Analysts

CALIFORNIA HEALTH BENEFITS REVIEW PROGRAMJanuary 16, 2014

CHBRP Report Sections

• Introduction

• Background

• Medical Effectiveness

• Cost Impacts (Benefit Coverage Utilization and Cost Impacts)• Cost Impacts (Benefit Coverage, Utilization, and Cost Impacts)

• Public Health Impacts

• Long Term Impacts

Introduction and Background

What you can find in the Introduction

• Bill interpretation

• Key assumptions: How CHBRP approached analysis of the bill

• How the mandate would interact with:E i ti t t l d t t d t◦ Existing state law and state mandates

◦ Existing federal law and federal mandates, including:▪ Affordable Care ActAffordable Care Act▪ Federal Preventive Services in the ACA

What you can find in the Background Section

• Provides background information on the condition or disease, which can include:◦ A description of the condition or disease; ◦ Estimates of how widespread the disease or

condition is and of the risk of getting the disease; ◦ Information on treatment(s); and◦ The impact of the disease on specific populations.

Medical Effectiveness

What does the Medical Effectiveness section tell you?

• Answers the question: “Does scientific evidence indicate whether the treatment works?”◦ Scientific evidence includes:▪ Peer-reviewed publications, (e.g., published

randomized control trials and other studies);▪ Other published information, (e.g., clinical

guidelines); and▪ Expert opinion.

Medical Effectiveness Categories of Evidence

Clear & Convincing

Ambiguous / Conflicting

Insufficient Evidence

Preponderance of Evidence

It works.It seems to work. There is not

OR OR The evidence cuts both ways.

enough evidence to determine whether it does

It doesn’t work. It seems not to work.

or does not work.

New this year! – Summary Graphic

N t Eff ti Eff tiLower Higher

Clear and Convincing Clear and Convincing

High Moderate Low Low Moderate High

Ambiguous

Not Effective Effective

Preponderance of Evidence Preponderance of Evidence

N t Eff ti Eff tiLower Higher

Clear and Convincing Clear and Convincing

AmbiguousInsufficient evidence to make a call

Not Effective Effective

Preponderance of Evidence Preponderance of Evidence

Report Examples

Cost Impact Analysis

Why Cost Impact Analysis?

• Would more enrollees receive coverage (for the / i )?treatment/service)?

• Would more enrollees (now with coverage) use the treatment/service?treatment/service? • How much more could this cost?◦ Employers?◦ Enrollees?◦ State?

• Is this how California wants to spend its health care dollars?

Cost Impact Analysis Answers Policymakers’ Questions• Cost Impact Analysis measures incremental change in three• Cost Impact Analysis measures incremental change in three

areas:◦ Coverage: Will more enrollees have coverage for the treatment/service?

◦ Utilization: Now that enrollees have coverage for the treatment/service, will demand and use of the treatment/service change?

◦ Cost:

will demand and use of the treatment/service change?

What is the change in total cost – taking into account both the change in coverage and change in utilization of a g g gtreatment/service.

Important to Note About Cost Impact Analysis• Estimates: They are estimates• Estimates:

• 12-month

They are estimates.

They reflect a world 12 months after enactment of the12 month timeframe:

They reflect a world 12 months after enactment of the benefit.

• Affects only state-regulated health

Not all enrollees with health insurance will be affected, only those with state-regulated health insurance, or insurance specified in the proposed mandate.health

insurance:

CHBRP Analyzes Incremental Impact on S R l d H l h IState-Regulated Health Insurance

California Regulatory Agency

CDI10%None*

DMHCState-regulated

67%57%Neither**

* N U i d

* None = Uninsured** Neither = Federally regulated

37Source: California Health Benefits Review Program, 2013

Results of CHBRP Cost Impact Analysis

• Table 1 “Impacts on Benefit Coverage, Utilization, and Cost, 2015”

Three “standard” tables in most reports:

Table 1

•Table “X”

p g , , ,• Found at the end of Executive Summary.

“Per Member Per Month Premiums and Total Expenditures by Market Segment, California, 2015.” • Found at the end of the Benefit Coverage, Utilization, and

Cost Section

• Table “Y” “Impacts of the Mandate on Per Member Per Month Premiums and Total Expenditures by Market Segment, California, 2015.”• Found at the end of the Benefit Coverage, Utilization, and

Cost Section

Table 1. Summarizes CHBRP FindingsTable 1. AB/SB XX Impacts on Benefit Coverage, Utilization, and Cost, 2015

Premandate Postmandate Increase/Decrease

Change Postmandate

Benefit coverageTotal enrollees with health insurance subject to state benefit mandates (a) 25,899,000 25,899,000 0 0%Total enrollees with health insurance subject to SB/AB XXX 25,899,000 25,899,000 0 0%Percentage of enrollees with coverage for the mandated benefit 90% 100% -10% 11%Number of enrollees with coverage for the mandated benefit 23,309,100 25,899,000 (2,589,900) 11%

Utilization and CostNumber of enrollees using benefit 25,899,000 25,899,000 0 0%Average per-unit cost $855.52 $855.52 $0 0%

Expenditures

Premium Expenditures by PayerPrivate employers for group insurance $78 385 161 000 $78 387 130 000 $1 969 000 0 0025%Private employers for group insurance $78,385,161,000 $78,387,130,000 $1,969,000 0.0025%CalPERS HMO employer expenditures (c) $4,016,233,000 $4,016,233,000 $0 0.0000%Medi-Cal Managed Care Plan expenditures $12,480,492,000 $12,480,492,000 $0 0.0000%Enrollees for individually purchased insurance $13,639,719,000 $13,640,224,000 $505,000 0.0037%Enrollees with group insurance, CalPERS HMOs Covered California and Medi CalHMOs, Covered California, and Medi-Cal Managed Care (b) $21,272,946,000 $21,273,465,000 $519,000 0.0024%

Enrollee ExpensesEnrollee out-of-pocket expenses for covered benefits (deductibles, copayments, etc.) $14,462,198,000 $14,459,659,000 -$2,539,000 -0.0176%Enrollee expenses for noncovered benefits (d) $6 500 000 $6 500 000 $0 0 0000%

(d) $6,500,000 $6,500,000 $0 0.0000%$144,263,249,000 $144,263,703,000 $454,000 0.0003%Total expenditures

Table 1. Summarizes CHBRP FindingsTable 1. AB/SB XX Impacts on Benefit Coverage, Utilization, and Cost, 2015

Premandate Postmandate Increase/Decrease

Change Postmandate

Benefit coverageTotal enrollees with health insurance subject to state benefit mandates (a) 25,899,000 25,899,000 0 0%Total enrollees with health insurance subject to SB/AB XXX 25,899,000 25,899,000 0 0%Percentage of enrollees with coverage for the mandated benefit 90% 100% -10% 11%Number of enrollees with coverage for the mandated benefit 23,309,100 25,899,000 (2,589,900) 11%

Utilization and CostNumber of enrollees using benefit 25,899,000 25,899,000 0 0%Average per-unit cost $855.52 $855.52 $0 0%

Expenditures

Premium Expenditures by PayerPrivate employers for group insurance $78 385 161 000 $78 387 130 000 $1 969 000 0 0025%Private employers for group insurance $78,385,161,000 $78,387,130,000 $1,969,000 0.0025%CalPERS HMO employer expenditures (c) $4,016,233,000 $4,016,233,000 $0 0.0000%Medi-Cal Managed Care Plan expenditures $12,480,492,000 $12,480,492,000 $0 0.0000%Enrollees for individually purchased insurance $13,639,719,000 $13,640,224,000 $505,000 0.0037%Enrollees with group insurance, CalPERS HMOs Covered California and Medi CalHMOs, Covered California, and Medi-Cal Managed Care (b) $21,272,946,000 $21,273,465,000 $519,000 0.0024%

Enrollee ExpensesEnrollee out-of-pocket expenses for covered benefits (deductibles, copayments, etc.) $14,462,198,000 $14,459,659,000 -$2,539,000 -0.0176%Enrollee expenses for noncovered benefits (d) $6 500 000 $6 500 000 $0 0 0000%

(d) $6,500,000 $6,500,000 $0 0.0000%$144,263,249,000 $144,263,703,000 $454,000 0.0003%Total expenditures

Change in Total and Aggregate Expenditures by Category Postmandate

$1,969,000 Employer premium expenditures

$505,000 Individual premium expenditures

$519,000 Employee premium Expenditures

-$2,539,000 Out-of-pocket expenses for covered benefits

$454,000 Net change in expenditures

CHBRP Estimates Segment-Level Changes Per Member and in Total

TABLE Y. Impacts of the Mandate on Per Member Per Month Premiums and Total Expenditures by Market Segment, California,

DMHC-Regulated CDI-Regulated

Privately Funded Plans Publicly Funded Plans Privately Funded Plans

Per Member and in Total

Large GroupSmall

Group Individual CalPERS

HMOs (b)

MCMC (Under 65)

MCMC(65+) (d)

Large Group

Small Group Individual Total

Enrollee CountsTotal enrollees in plans/policies subject to

11,289,000 2,479,000 1,029,000 854,000 5,203,000 688,000 539,000 1,315,000 1,877,000 25,899,000

(by Market) (a) Publicly Funded Plans

(by Market) (a)

plans/policies subject to state mandates (e)Total enrollees in plans/policies subject to

11,023,883 2,479,000 1,029,000 854,000 5,203,000 688,000 538,696 1,304,827 1,874,807 25,621,212

Premium CostsAverage portion of premium paid by

$0.01 $0.01 $0.00 $0.00 $0.00 $0.00 $0.01 $0.01 $0.00 $1,969,000

Average portion of premium paid by

$0.00 $0.01 $0.01 $0.00 $0.00 $0.00 $0.00 $0.00 $0.01 $1,024,000

Total premium $0.01 $0.01 $0.01 $0.00 $0.00 $0.00 $0.01 $0.01 $0.01 $2,993,000

Enrollee ExpensesEnrollee expenses for covered benefits

-$0.01 -$0.01 -$0.01 $0.00 $0.00 $0.00 -$0.01 -$0.01 -$0.01 -$2,539,000

(deductibles, copays, Enrollee expenses for benefits not covered (f)

$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0

Total expenditures $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $454,000

Postmandate Percentage Change Percent change insured 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

premiums

Percent Change total expenditures

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Public Health Impacts

What you can find in the Public Health Impacts section

Th i l l f d h l h b fi d h h l h• The potential value of a proposed health benefit mandate – what health outcomes are improved at what cost

• Draws on:• Draws on: ◦ Estimates of how widespread the disease or condition is and mortality data;

and Th l f h di l ff i i d h i l i◦ The results of the medical effectiveness review and the cost impact analysis.

• Presents findings on:Th h lth ff t f th b fit d t◦ The one year health effects of the benefit mandate;

◦ The impact on gender and racial disparities; and◦ The impact on premature death and economic loss.

Public Health Impacts Conclusions

Quantitative Qualitative No Impact Unknown I tQ Q p Impact

Tobacco Cancer Related Fail First for Maternity Cessation Services

+5 000 q itters

Lumpectomy

Coverage

Pain Drugs

Effect unknown

Services

Less infant+5,000 quitters and +40,000 life years

Coverage mandated – no utilization change & no PH impact

Effect unknown – PH impact of change unknown

Less infant mortality and fewer pre-term births & no PH impactbirths

Long Term Impacts

Balancing Perspectives

•Estimates reflect They reflect a world 12 months after enactment of the•Estimates reflect 12-month timeframe:

They reflect a world 12 months after enactment of the benefit.

• Mandates are in effect longer

The benefits and costs of a mandate do not often accrue il f d h b deffect longer

than 12 months:until many years after a mandate has been enacted.

New separate section on Long

Term ImpactsTerm Impacts

Wrap-up

CHBRP Report Sections Wrap-up

• Introduction

• Background

• Medical Effectiveness

• Cost Impacts (Benefit Coverage Utilization and Cost Impacts)• Cost Impacts (Benefit Coverage, Utilization, and Cost Impacts)

• Public Health Impacts

• Long Term Impacts

January 16, 2014

California Health Benefits Review ProgramReview...

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